The Ministry for Ecological Transition and the Demographic Challenge has launched the processing of a new firm power tender for a total of 820.5 megawatts (MW) in the electricity systems of the non-peninsular territories —Canary Islands, Balearic Islands, Ceuta, and Melilla—, with the aim of ensuring the coverage of the electricity demand forecast for the year 2031.
This second firm power tender begins with the public consultation of the proposed resolution that regulates the competitive bidding procedure to grant the favorable resolution of compatibility necessary for the recognition of the additional remuneration scheme in the extra-peninsular electricity systems.
After awarding more than 1,450 MW in the first call, resolved last February, the Ministry requested Red Eléctrica, as system operator, to conduct a prospective study to review the coverage needs for the next five years in the non-peninsular territories —the temporal horizon set in the regulations— and to anticipate possible supply shortages.
According to a note from the department headed by Sara Aagesen, Red Eléctrica's report, which incorporates the results of the first tender and the commissioning of several new interconnections, concludes that additional power will be needed in 2031 in all non-peninsular territories, mainly due to projected economic growth. The planned distribution is: Balearic Islands (80 MW), Gran Canaria (320 MW), Tenerife-La Gomera (230.5 MW), Lanzarote-Fuerteventura (95 MW), La Palma (52 MW), El Hierro (10 MW), Ceuta (1 MW), and Melilla (32 MW).
As in the first call, three types of projects may participate: new dispatchable generation units, new investments in existing units, and extensions of the regulatory useful life of operational facilities.
The selection of proposals will be made following a technical-economic ranking based on total cost savings, to which other criteria will be added, such as carbon emissions —which may not exceed 550 grCO2/kWh—, self-energization capacity, or plant location, taking into account connection nodes and the indications of the regional governments. Likewise, the technical threshold is raised to launch a signal that favors the incorporation of more efficient equipment.
In the specific case of the Canary Islands, the renewal of the generation park is promoted through the entry of new units, by penalizing the participation of units over 40 years old in 2031, and it will be required that new installations can use at least 5% of fuel of renewable origin, provided it is available.
Framework for electricity storage in non-mainland systems
In parallel, the Ministry has submitted for public consultation the Draft Royal Decree that modifies Royal Decree 738/2015, of July 31, which regulates the activity of electricity generation and the dispatch procedure in the systems of the non-mainland territories.
The new regulation designs the legal framework for electricity storage in these systems, both for hybrid installations with generation plants and for independent (stand-alone) installations.
For the first time, the marginal average price of generation in the Canary Islands systems will be published, introducing a market mechanism that will allow storage facilities to compete directly with the prices of conventional power plants that use fossil fuels.
The Ministry explained that the Draft Royal Decree establishes a dispatch scheme in which, for stand-alone batteries, the system operator determines their operation based on a price signal intended to incentivize investment.
In the case of batteries associated with photovoltaic and wind farms, the incentive will be the so-called thermal gap factor, which promotes the injection of stored energy into the system at times when a greater contribution of fossil generation is required to cover demand.
Greater income stability for renewable generation
The project also incorporates a relevant reform: the substitution of the current daily price by the average price of the mainland electricity market of the last rolling year as a reference for remunerating renewable generation.
With this modification, the Ministry considers that "greater income predictability is provided, new investments are encouraged, and it is avoided that power plants do not produce when the mainland price is zero or negative, even though in the non-mainland territories they would be reducing fossil generation, with the subsequent total savings."
The Secretary of State for Energy, Joan Groizard, stressed that, with this package of measures, "we continue to deepen the ecological transition beyond peninsular Spain, promoting the integration of renewables and helping to reduce external energy dependence".